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The Sixth generation of video game hardware (1998-2013) expanded the home console market. This era introduced online gaming. After SEGA's market failure with the SEGA Saturn, they released a new console in 1999 known as the Dreamcast. During the Dreamcast's development, Sony announced the PlayStation 2 which would be released one year later. The Dreamcast did well for 1999 and 2000, but SEGA couldn't compete with the PlayStation 2's DVD capability and growing game library, as well as the announcement of Microsoft's Xbox and Nintendo's GameCube. SEGA dropped out of the hardware market, and joined the 3rd party game designer business. The three consoles competed for the next five years until the next generation came to be.

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